Motilal Oswal - LARSEN TOUBRO LIMITED (LT) MOSL: LARSEN AND TOUBRO (Buy)-Board approves buyback proposal; INR90b buyback plan at maximum price of INR1,500 per share

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Motilal Oswal

MOSL: LARSEN AND TOUBRO (Buy)-Board approves buyback proposal; INR90b buyback plan at maximum price of INR1,500 per share

LARSEN AND TOUBRO: Board approves buyback proposal; INR90b buyback plan at maximum price of INR1,500 per share

(LT IN, Mkt Cap USD27.0b, CMP INR1353, TP INR1570, 16% Upside, Buy)

Event: In a press release to the stock exchanges, L&T has informed that its Board of Directors have approved a buyback of equity shares of the company. The proposal includes buyback of up to 60m shares at a maximum price of INR1,500 per share for an aggregate amount of INR90b. This amounts to ~4.7% of L&T’s current market capitalization.

Details of buyback plan: L&T’s board of directors have approved a proposal to buy back up to 60m shares (4.29% of the total paid-up equity share capital, 18% of standalone net worth) at a maximum price of INR1, 500 per share for an amount of INR90b. This is the first ever buyback plan from L&T and would be subject to shareholder approval by means of a special resolution through a postal ballot.

Funding arrangement for the buyback plan: We believe that L&T is comfortably placed to fund its buyback program, given a) its healthy cash balance of INR80b (Consolidated level), b) recent sale of its stake (5.5%) in L&T Technology Services generating cash of INR7.9b, and c) current investment of INR128b as of March 2018 available with the company. Thus, we believe that buyback funding of INR90b would be comfortably met from internal resources and no debt would be required to fund the program.

24/08/2018 6 EN

Underlying

LARSEN & TOUBRO LIMITED

Larsen and Toubro is engaged in the following business segments: Engineering & Construction; Electrical & Electronics; Machinery & Industrial Products; and Other. Engineering and construction segment comprises execution of construction projects in civil, mechanical and electrical engineering. Electrical and electronics segment comprises the manufacture and sale of switchgear, petroleum dispensing pumps, and medical equipment. Machinery and industrial products segment comprises the manufacture and sale of industrial machinery and equipment. Other segment includes property and software development, generation of power for consumption by Haldia Petrochemicals Limited, and financial services.

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INE018A01030 National Stock Exchange of India India

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Motilal Oswal

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MOSL: LARSEN AND TOUBRO (Buy)-Board approves buyback proposal; INR90b buyback plan at maximum price of INR1,500 per share

Larsen & Toubro Limited: 3 directors

With a more favourable environment, LARSEN & TOUBRO LTD. improves to Slightly Positive

MOSL: LARSEN & TOUBRO (Buy)-Rightly placed to benefit from macro improvement

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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